Balancing the need for day-to-day financial management with the demand to grow and scale the business presents a challenge. At Octaura, a startup founded in 2022 that provides an electronic trading and analytics platform for the syndicated loan market, handling that falls on the shoulders of CFO/COO Jason Cohen.
As an early-stage employee, Cohen embodies what he sees as an essential trait of new hires at Octaura: “They need to be comfortable wearing many hats and working in a fluid environment.” Our Katie Kuehner-Hebert asked Cohen about leading finance at such a young company while juggling the role of head of operations.
Tell us how a CFO effectively leads the financial strategy for an early-stage company.
The foundational elements of maintaining proper books and financial records must be built in finance, like an accounting system to pay the employees and vendors. Hiring the right people is, of course, a crucial step. In a startup, the performance of every single employee counts so much more. At the same time processes are being run, the business needs to scale.
Fundraising is a key aspect of an early-stage venture; you’re always fundraising. You never go through a fundraising process, stop and then come back a year later to raise more capital. It’s a constant process.
Octaura launched with the backing of seven of the syndicated loan market’s leading dealers. Can you share some fundraising tips?
As I said, always think about fundraising if you’re a startup or early-stage company because it takes most businesses a long time to become profitable. My advice is not to chase profitability too early. If you do, you risk missing vital actions the organization needs to take to invest in the business’s growth.
The wrong approach is to avoid constant fundraising because you want to make the money you have last forever. If you’re going to watch every dime you spend, inevitably, you’ll be forced to underinvest in [some] critical area. You must get comfortable feeling like you’re running out of money—at least for the first three to five years. Embrace it; don’t avoid it.
To raise capital, you need to talk to people and network continually. Keep existing and potential new investors in the loop and regularly update them on the organization’s progress. You never know when business conditions will change, and you’ll need to tap new or existing investors for more capital. Waiting until you need the capital to start these conversations will be too late.
In addition, keep an open mind about the type of investors the organization wants. Of course, some strategic investors want a return but are equally interested in the strategic value you can bring to their businesses and the marketplace. Then, there are professional investors, like venture capital firms, who can help you reach a liquidity event or an exit so that they and everyone else with an equity stake can benefit.
Can you share some best practices for handling the dual role of CFO and COO?
Octaura is the first time I’ve served in this dual role after working separately in operations and finance. But throughout my career, I’ve always found it valuable to step outside my job as the “numbers person” and work hand in hand with every part of the business.
I work with the go-to-market team, the product team, the technology team and many others. We constantly discuss how operations and finance can support their functions. If they are building their operations, what funding do they need and when? Beyond funding, what infrastructure do they need to get their projects off the ground and execute the company’s business objectives to achieve the desired results?
My advice is to take a structured approach and go step by step with your colleagues. As the CFO, keep the big-picture financial goals in mind but also put on your COO hat to focus on all the little things needed to build the business to accomplish those goals.
What is one piece of advice you would give yourself before starting a role as a CFO/COO?
Two things: (1) brush up on your accounting and (2) become a storyteller. Basic financial and accounting principles are essential to the role. Storytelling is the exciting part, although personally, that’s one of the things I’m always working on. You have to build a narrative around what’s happening and get people who are not involved in the day-to-day operation to understand. It’s like writing a book—you want to tell a story people can get excited about.
